RALEIGH — It’s looking like the current film incentives program may be scrapped for a much different grant program for TV and movie production companies.
Other possible outcomes of this year’s legislative session include extending the current program or eliminating film incentives altogether. The existing legislation — credited with the recent surge in filming in North Carolina — offers a 25 percent rebate on spending by production companies. Without lawmakers’ intervention, the perks expire at the end of the year.
This is one of the bigger debates going on in Raleigh these days. To catch you up on the controversy, here are three reasons why the program might be extended and three reasons why it might be eliminated.
1) Jobs. A recent film industry study found that the industry provides more than 4,250 full-time jobs and thousands of part-time jobs. With such a focus on jobs and the economy these days, it would be difficult for lawmakers to allow the industry to pack up and leave. The employment numbers can be debated, but no one can say the industry doesn’t create jobs.
2) Charlotte and Wilmington. Much of North Carolina’s filming takes place in and around these two cities, so it’s not surprising that officials from these areas are the most vocal supporters of extending the program. Wilmington, known as “Hollywood East” and “Wilmywood,” would lose some of its identity if the incentives were eliminated and production companies chose other states. The reverse of this is that many counties haven’t seen any impact from filming, and lawmakers represent those areas, too.
3) House Speaker Thom Tillis. Tillis, a Mecklenburg County Republican, has supported film incentives in the past, and the industry is lobbying him aggressively to extend the program. Tillis is also running for U.S. Senate, and film supporters have warned that he would lose votes if he doesn’t protect the incentive. Tillis’ race against Democratic U.S. Sen. Kay Hagan is expected to be close.
1) Cost. Jobs, tourism and other economic benefits created by the industry don’t come without a cost. The state paid out $60.1 million in the 2012-13 fiscal year. Incentive opponents say that money would be better spent on other priorities, such as teacher pay and roads.
2) Tax reform. Eliminating tax breaks and incentives that support one industry over others was one of the major aims of the Republican-led tax reform initiative. If Republicans allow the existing film program to continue, they risk looking like they’re picking winners, which they’ve railed against repeatedly. The other side says many other tax breaks still exist, too.
3) Questionable projects. Opponents point to a few companies that received generous amounts in film incentives without providing much of an economic boost. Two late-night talk shows, for example, received a combined $300,000 in refunds after spending a few days in the state during the Democratic National Convention in Charlotte. And when ABC’s “Extreme Makeover: Home Edition” filmed two episodes in North Carolina, its production company claimed $590,000 in incentives.
Film supporters say they don’t see that as “abuse” of the system because those projects complied with the law as its written. But incentives laws certainly could be written tighter to prevent questionable projects from cashing in.